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February 22, 2022

How will you manage an RRSP contribution this year?

Save for Lady Gaga and Charlie Sheen’s publicist, the most creative people on earth this stretch of the calendar may be Canadians at tax time.

Istockphoto_8595689-financial-belt-tightening Admit it, you or your accountant turn into a mix of David Blaine and Hosni Mubarak ahead of your annual filing, figuring how best to hide and manipulate your money to keep it from the CRA.

Yet when trying to whittle down that taxable income, Canucks appear to be struggling with that ever-important conundrum: how the hell can I actually max out my RRSP contribution this year?

Indeed, it’s a sad state of affairs among the modern finances of Canadians. Everyone knows the responsible thing to do is put away for retirement (thus easing your tax hit come April) but why can’t we seem to do it?

Times are tough, sure, yet less than six million Canadians contributed to their RRSP in the 2009 tax year – only about a quarter of all tax filers, according to the CBC.

So, as the economy continues its repair and the March 1st RRSP deadline nears, we get creative with how to find money to put away.

For instance, some Canadians borrow to contribute to their RRSP, a scenario that seems fine on paper but can easily get messy, notes Metro financial columnist Alison Griffiths.

“You take out a loan, make the (RRSP) contribution, get a tax deduction and, hopefully, a refund,” she writes. Then “you repay the loan, the investments grow and you live happily ever after.”

Of course, such inventive measures should only be taken if your other ducks are in line – which is to say, if you’ve got other high-interest debt, such as a looming credit card balance, it’s probably just best to focus on paying that down rather than bothering with your RRSP.

In any case, there are a million ways we try to get our dough into an RRSP, whether we actually get there or not.

So, what’s yours? How will you contribute to your RRSP this year? Or, if you’re not contributing, why not?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...